June 17, 2011

The Affordable Care Act, often called simply 'Obamacare', has called for the establishment of health care exchanges in order to allow for the education and enrollment in new health care programs. The idea is that individuals can go to these exchanges to compare plans purchase plans on a wider scale and less expensive basis than currently offered. While this idea sounds great in principle, is it doomed to fail from the start? This is exactly the question posed by Director of the Manhattan Institute's Center for Medical Progress Paul Howard and University of Minnesota Insurance Industry Chair of Health Finance Stephen T. Parent e in a guest opinion piece for Kaiser Health News.

While the merits of the exchanges have been debated often before, Howard and Parent e bring up a unique criticism of the logistics of such a massive collaboration:

"Logistically, these requirements present a massive challenge. For the first time, secure data feeds from the Departments of Homeland Security (establishing legal immigrant or US citizen status), Justice (for felon history), Treasury (for tax return information to impute income) and the Social Security Administration (establishing that the recipient is not deceased) would have to be combined. These data feeds would then have to be securely coordinated by the Department of Health and Human Services. There is no history of these agencies ever bringing their data together at this scale. It would qualify as the largest IT integration project in U.S. history. "

Given this perspective, it is difficult to imagine that implementing health care exchanges will actually cause administration costs to decrease, as widely proclaimed by proponents of an exchange system. Add this new found skepticism of the exchanges administration abilities to the existing merit-based criticism of exchanges in the first place and it is clear Howard and Parent e have posed an apt question: Are these health exchanges built to fail?